What advice would you give people to manage their money during a recession?
The best investing advice I can give is to ignore current economic conditions when making investment decisions. You should have a target asset allocation strategy (mostly stocks and fixed-income) that you follow, regardless of the economy. If your actual stock or fixed-income allocation differs from your target percentages, then fix the discrepancy by rebalancing. Otherwise, in general, do nothing different.
But suppose we are in a recession, and the stock market is well off its highs. If you are willing and able to handle the risk, and if you are relatively young (say, under 50), I recommend investing more in stocks. Stock valuations typically bottom out just as a recession begins, and the most dramatic returns have been realized as the stock market recovers first and then the economy improves. Taking this step often requires a strong stomach because all the current economic news will be negative, and equity values are declining. You may be early, and stocks will continue to decline. But be patient. Let me add that although this strategy has always fared well in the past, there is never a guarantee that it will fare well. It is still a risky bet.
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